Steel and Aluminum Tariff Impacts to Affect Recycling Industry

This month, new tariffs have been imposed to impact the steel and aluminum industries. The president is seeking a long-term goal to strengthen domestic industries, but industry groups expressed their concerns for the affects this could have on the recycling industry. Though some countries were offered relief, there is still a lingering uncertainty.

From the President and Department Reports

Resource Recycling originally reported on the possibility of imposing import tariffs on steel and aluminum markets based on the president’s March 1 remarks. The tariffs are imposed 25% for steel and 10% for aluminum, matching the original percentages that were discussed.

The tariff discussion sprouted after the Department of Commerce released aluminum and steel import reports. Resource Recycling tells us, “They found substantial impacts on the domestic industries for each material, and characterized the effects as a national security threat.” Though they have been characterized as a threat, other countries are not recognizing it the same.

Goals of the Tariffs

According to the March 1 remarks, the president describes the aluminum companies in the U.S. as being treated unfairly by “bad policy, by bad trade deals, [and] by other countries.” He continues with his goal, which is to strengthen both these industries with these tariffs. Industry groups also feel that overseas companies have an unfair advantage. The tariff’s goal is to alleviate some of this competition in the steel and aluminum industries, but industry groups still express uncertainty for how the tariff will play a role.

Industry Opinions and Uncertainty

SWANA (Solid Waste Association of North America), ISRI (The Institute of Scrap Recycling Industries), and NWRA (The National Waste and Recycling Association) took similar stances on the issue when it was first brought into discussion. These groups tried to remain optimistic, but know there will be costs associated with the changes.

Other groups demonstrated a shift in perspective with some optimism for the change. The American Iron and Steel Institute extended their praise and thanked the president “for addressing the steel crisis.” The Aluminum Association responded with a similar tone by noting, “We appreciate the President’s commitment to strengthening the U.S. aluminum industry.”

There are concerns that steel could become too expensive or even difficult to acquire with import restrictions. There are also worries about how this will affect other industries, such as plastics. Similar to the other changes in the industry, only time will tell us more information about the impacts and how they will affect other countries. The tariffs are expected to go into effect at the end of March, according to Washington Post.

The uncertainty continues even after the tariffs have been signed into action and the president offered comments about being flexible. He offered relief to allies, giving Canada and Mexico an exemption, but also mentioned a possibility to add other countries as exemptions.

Trade Impacts

The European Commission conveyed their disapproval for the tariff when President Juncker stated, “We strongly regret this step, which appears to represent a blatant intervention to protect US domestic industry and not to be based on any national security justification.” Other countries followed with comparable responses along with the World Trade Organization that noted, “It is clear that we now see a much higher and real risk of triggering an escalation of trade barriers across the globe.” The responses and reactions to the tariff are almost mimicking the responses from China’s import ban, but we hope to find clarity soon.

At Berg Mill, we continue to work hard on creating solutions to overcome fluctuating commodity markets, opening markets in other countries, forging strategic alliances, and improving domestic processing capabilities.